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June 11, 2012—A decade ago, I wrote an article about Emerson Electric, which had embraced electronic commerce as a way to integrate its diverse companies and lower its procurement costs (see Case Study: Emerson Electric Inc. and Innovation). The firm had grown through acquisition, and had different divisions buying the same items at sometimes dramatically different prices. Emerson’s senior leadership realized that if it adopted a common e-commerce platform, it could integrate purchasing and leverage greater buying power, thereby lowering costs and gaining an advantage over its competition. So rather than one unit buying 50,000 items for, say, $200 each and another purchasing 1,000 of the same asset for $300 apiece, the company could instead buy 51,000 units, each priced at $200. Doing this over tens of thousands of products could add up to millions of dollars in savings.

I bring this up now because I am beginning to see businesses take a more strategic approach to deploying radio frequency identification. Rather than viewing the technology as a way to solve a single business problem, some companies are starting to understand that RFID can be used to achieve a larger end goal—unifying disparate business units into a more efficient whole, for instance.

For conventional retailers, RFID provides the kind of inventory visibility that enables them to improve efficiencies and cut costs, so that they can compete with their online-only rivals. Macy’s is a good example of this. The U.S. department-store chain wants to boost inventory accuracy, but it has a larger goal in mind: It wants to be an “omni-channel” retailer. That is, it wants customers to be able to buy an item through a phone or online and then pick it up at a store, or to purchase a product via phone, have that item shipped from a nearby store to their home and, if it doesn’t fit, return it to the store. To achieve this fundamental change in how it does business, the retailer requires highly accurate inventory monitoring and visibility. RFID is the technology that can offer Macy’s that ability.

I know of one manufacturing company that, like Emerson Electric, grew through acquisition. The company operated different IT systems and business processes across its many units. After installing new SAP enterprise resource planning (ERP) software across its enterprise, the firm realized that its many different business processes made it difficult to make SAP work without a great deal of customization. The company is now implementing RFID to track work-in-process (WIP) and finished inventory, in order to ensure that all units perform similar tasks according to the same process. RFID business processes are, in a sense, becoming the common language across the various manufacturing units.

Coal exports are one of Indonesia’s biggest foreign-exchange earners. So it seems counterproductive for Jakarta to be considering export restrictions and increased royalties for coal, as part of a sweeping move to limit exports of raw commodities and promote job-creating processing plants being established.

This, at least, is the view of Garibaldi Thohir, president director of Adaro Energy, Indonesia’s second-biggest coal miner by production.

Rather than hitting exports, Mr Thohir believes the best way to boost economic development in this energy-starved nation of 240m people is for the government to offer incentives for new coal-fired power plants to be built.

“Coal is different from minerals, as it is a finished product,” Mr Thohir tells the Financial Times in an interview at the company’s office tower in Jakarta. “The only way we can add value to the coal industry is by building coal-fired power plants.”

Adaro, which is majority-owned by Mr Thohir and four other Indonesian businessmen, has a clear vested interest in pushing Jakarta to promote coal-fired power. The company recently moved in to the sector as part of a broader acquisition and diversification programme. It is hoping to complete financing later this year for a $4bn joint venture with two Japanese companies to build the biggest coal-fired power station in south-east Asia on Java.

Indonesia is the world’s largest exporter of coal for power stations, supplying the rapidly growing energy needs of China and India, as well as developed markets in South Korea, Japan and the west.

But, despite an economic boom over the past decade driven by the export of natural resources, Indonesia itself remains woefully short of power. The country has four times more people than the UK but its electricity grid, at 34GW, is only half as big, according to Adaro.

Mr Thohir believes that, in order to sustain its GDP growth rate of around 6 per cent per year, Indonesia needs to expand power production by 12 per cent per year. He appears confident that his company, which made earnings before interest, taxes, depreciation and amortisation of $1.47bn on net revenue of $3.99bn, can weather the latest regulatory storm.

Just as concerning to investors at the moment is the recent drop in coal prices, the result of a glut in supply at a time when economic growth in the important markets of China and India appears to be slowing.

The Indonesian government’s coal reference price has fallen from $112.87 per tonne in March to $96.65 per tonne this month. Some analysts have predicted that it could fall as low as $80 per tonne in the coming months, which would be below the production cost for some smaller, more expensive producers.

Like other Indonesian coal miners, Adaro’s shares have fallen sharply since the start of the year, dropping 28 per cent.

Though Adaro is planning to increase production from 47.7m tonnes last year to 50m-53m tonnes this year, Mr Thohir is cautious about further signs of slowing demand growth in China.

But, while price volatility goes with the territory, he reckons the long-term prospects for Indonesian coal are good.

“Our geographic position is better than our other competitors such as Australia, South Africa and Colombia,” he said. “If we believe in the Asian story of China, India, Vietnam and Myanmar coming up, then our future for the next 20 to 30 years will still be very competitive.”